The Legacy of The Council On Wage and Price Stability

THE LEGACY OF THE COUNCIL ON
WAGE AND PRICE STABILITY

Thomas D. Hopkins, Benjamin Miller,
and Laura Stanley
MERCATUS
RESEARCH
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Copyright 2014 by Thomas D. Hopkins, Benjamin Miller, Laura Stanley,
and the Mercatus Center at George Mason University
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Release date: August 26, 2014
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ABOUT THE AUTHORS
Thomas D. Hopkins is Professor Emeritus of Economics at Rochester Institute of
Technology, where he taught from 1988 to 2012. During the Ford, Carter, and Reagan
administrations he was on the staff of the Council on Wage and Price Stability. In
1981, as the councils acting director, Hopkins managed the agencys closure and the
transfer of its regulatory oversight functions and staff to the Office of Management
and Budget. He then served from 1981 to 1984 as deputy administrator of the Office
of Information and Regulatory Affairs within the Office of Management and Budget.
Hopkins also has taught at American University, the University of Maryland, and the
US Business School in Prague, and from 1998 to 2005 served as dean of Rochester
Institute of Technologys College of Business. He received his PhD in economics
from Yale University and his BA from Oberlin College.
Benjamin Miller earned his BS from Charleston Southern University, where he
double-majored in economics and business management and founded the Market
Economics Society. He earned his MA in economics from George Mason University
while part of the Mercatus Center at George Mason Universitys MA Fellowship.
As a Mercatus MA fellow, Miller focused on regulations and regulatory analysis.
He currently works as an economist at the Federal Energy Regulatory Commission.
Laura Stanley is an MA student in the Department of Economics at George Mason
University. She is also a Mercatus MA fellow. Stanley earned her BS in economics
from James Madison University. She previously worked as an intern at the George
Washington University Regulatory Studies Center and the Heritage Foundation.
MERCATUS CENTER AT GEORGE MASON UNI VERSI TY
4
ABSTRACT
Applying benefit-cost analysis in the White House regulatory oversight pro-
cess served as a basic mission of the Council on Wage and Price Stability (CWPS)
during its seven-year lifespan (19741981). This paper reviews that CWPS expe-
rience, which involved filing comments in over 300 proceedings at more than 25
federal regulatory agencies. Many of the CWPS filings are now available through
the Mercatus Center at George Mason University. This paper draws on those filings,
identifying persistent and pervasive deficiencies in the economic analysis regula-
tors then and now often use as support for new regulation. CWPS filings fostered
greater acceptance of benefit-cost analysis in regulatory decisions; such analysis is
now required by executive order.
JEL codes: D04, D61, D62, D7, H00, K2, K30, K4, L38, L51
Keywords: regulation, benefit-cost analysis, regulatory reform, regulatory over-
sight, regulatory burden, regulatory costs
5
T
he US regulatory setting of 2014 is in many ways far more complex than
that of four decades ago. Entirely new regulatory agencies with ambitious
agendas have sprung up, and new layers of regulatory oversight are now in
place. The Department of Homeland Security, the Consumer Financial Protection
Bureau, and the Office of Information and Regulatory Affairs are but a few of todays
players that did not exist in 1974. Indeed, much of the US regulatory system is new
and different.
Yet changes made to federal regulation during the 1970s were just as controversial
and hard-fought as those now being considered. Despite all that has changed in the
regulatory system, there may be enough commonality in issues and practices to war-
rant another look at the legacy of a regulatory oversight experiment that took place
during the years 19741981. That experiment was the regulatory intervention pro-
gram of a small agency located in the Executive Office of the Presidentthe Council
on Wage and Price Stability (CWPS). This paper explores the extent to which the
CWPS program may have continuing relevance for regulatory decision-making.
Before 1974, federal regulations were largely the individual provinces of agencies
that sought to implement federal laws. Such laws typically delegated substantial
and open-ended regulatory powers to agencies.
1
The president had virtually no role
in the regulations emanating from independent agencies (whose agency heads do
not serve at the pleasure of the president). For executive branch agencies, such as
the departments of Agriculture and Labor, the president, through his White House
staff, had authority to offer guidance to regulators but rarely became involved in
particular regulations. Regulatory oversight came primarily from judicial review
and from intermittent interaction between congressional oversight committees and
regulatory agencies.
In 1974, President Ford signed the Council on Wage and Price Stability Act,
which provided congressional authorization for a new unit within the White House,
1. For example, consider the language from a key statute for the Department of Labor, 2(b) of 29 U.S.C.
651 (1970), authorizing the Secretary of Labor to set mandatory occupational safety and health stan-
dards. The agency, faced with virtually no further statutory guidance nor constraints, was to create safe
and healthful working conditions for all.
6
charged, among other things, to intervene directly in specific rulemakings of all fed-
eral agencies. This law directed CWPS to focus attention on the need to increase
productivity in both the public and private sectors . . . and present its views as to the
inflationary impact that might result from regulatory actions.
2
CWPS lacked the
power to force change, but because CWPS interventions took the form of public
comments (often termed filings) during the development of a new regulation,
they offered a novel form of oversight and White House influence. Private parties
and the news media could and did buttress many CWPS filings, raising the cost to
regulators of ignoring the messages conveyed.
The basic thrust of those CWPS filings was a straightforward application of
microeconomics. A small staff of economists, reporting to the CWPS director, a
presidential political appointee, wrote the filings. With respect to executive branch
agencies, CWPS was guided both by its statute and by a succession of executive
orders (EOs) each president issued. These EOs outlined criteria and considerations
that regulations and their analyses should reflect.
3
In dealing with independent
agencies, CWPS was guided only by the wording of its statute.
During the Carter administration, the preparation and submission of CWPS fil-
ings was augmented by the creation of the Regulatory Analysis Review Group. This
White House entity brought together economists from the Council of Economic
Advisors, the Office of Management and Budget, and several cabinet agencies when-
ever particularly important regulatory proposals were pending. CWPS then filed
the groups reports, and because they reflected the consensus view of the major
branches of the Executive Office of the President as well as the affected regulatory
agencies, they had an enhanced political appeal.
4
Soon after President Reagan took office in 1981, the newly created Office of
Information and Regulatory Affairs (OIRA), located within the Office of Management
and Budget, became the new home of the CWPS regulatory economists and their
oversight activity. White House oversight henceforth operated through OIRA
enforcement of new executive orders that preserved and extended the economic
analysis advocacy of earlier executive orders.
5
Congress did not reauthorize CWPS
2. Pub. L. No. 93-387, as amended, 3(a)(5), 3(a)(7), and 3(a)(8). CWPS had two largely unrelated
roles: regulatory oversight (the focus of this paper) and private-sector wage-price monitoring (not here
considered).
3. Issued by President Ford: Exec. Order 11821, 39 Fed. Reg. 41501 (Nov. 27, 1974); Exec. Order 11949, 42
Fed. Reg. 1017 (Dec. 31, 1976). Issued by President Carter: Exec. Order 12044, 43 Fed. Reg. 12661 (March
23, 1978); Exec. Order 12221, 45 Fed. Reg. 44106 (June 27, 1980).
4. W. Kip Viscusi et al., Economics of Regulation and Antitrust, 4th ed. (Cambridge, MA: MIT Press,
2005), 26.
5. Issued by President Reagan: Exec. Order 12291, 46 Fed. Reg. 13193 (Feb. 17, 1981); Exec. Order 12498,
50 Fed. Reg. 1036 (Jan. 4, 1985). Issued by President Clinton: Exec. Order 12866, 58 Fed. Reg. 51735 (Sept.
30, 1993). Issued by President George W. Bush: Exec. Order 13258, 67 Fed. Reg. 9385 (Feb. 26, 2002).
Issued by President Obama: Exec. Order 13563, 76 Fed. Reg. 3821 (Jan. 18, 2011); Exec. Order 13579, 76
Fed. Reg. 41585 (July 11, 2011); Exec. Order 13610, 77 Fed. Reg. 28467 (May 10, 2012).
7
in 1981, and the type of public filings CWPS had undertaken was discontinued. From
1981 to the present, OIRA has managed the White House role in regulatory oversight,
focusing on executive branch agencies but excluding the independent ones.
During its seven-year existence, CWPS intervened in more than 300 regulatory
proceedings at over 25 federal regulatory agencies. Early in 1981, CWPS senior staff
wrote a summative review assessing the record of those filings.
6
That 1981 review
and many of the CWPS filings themselves have been preserved by the Mercatus
Center at George Mason University.
7
As a result, an intriguing opportunity exists to
review this assessment with three decades of hindsight. This paper draws on those
CWPS documents, identifying elements that may have continuing relevance to cur-
rent regulatory activity.
8
Briefly put, the basic conclusions of the 1981 summative
report remain disconcertingly overlooked in many regulatory areas today, although
much in the regulatory landscape has changed.
The 1981 CWPS report stressed that regulators frequently neglect to ask whether
a significant problem exists in the marketplace that deserves policymakers atten-
tion. This indeed should be characterized as the first principle of regulatory policy,
and eventually, in 1993, President Clintons Executive Order 12866 did so declare.
Unless some strong impediment exists that prevents normal functioning of
reasonably competitive markets, CWPS contended, regulatory intervention in
these markets can only misallocate resources and decrease consumer welfare.
9

On these grounds, CWPS found little justification for most regulation of prices,
rates, and entry. This represents a success story, since whole swaths of economic
regulation that CWPS considered fundamentally inefficient no longer exist. Such
economic regulation had become deeply entrenched in transportation industries;
indeed, nearly 90 CWPS filings were critiques of economic regulation at the Civil
Aeronautics Board and the Interstate Commerce Commission. Economic logic ulti-
mately prevailed in this quarter, for the most part, and today little such regulation
remains in transportation markets. This is a mark of much progress.
However, international trade restrictions are also a form of economic regulation,
and in this areawhich attracted 10 CWPS filingsfar less headway has been made.
Consumers are still denied access to less costly products and services by a staggering
array of both explicit and subtle barriers that lack economic rationale. World prices
6. Thomas D. Hopkins, Thomas M. Lenard, John F. Morrall III, and Elizabeth A. Pinkston, A Review of
the Regulatory Interventions of the Council on Wage and Price Stability, 19741980 (Council on Wage
and Price Stability, Washington, DC, January 1981), available at http://cowps.mercatus.org/2014/07/17
/cwps-review-1974-1980/.
7. These CWPS filings are accessible at http://cowps.mercatus.org.
8. Other insightful perspectives on CWPS contributions can be found in George C. Eads and Michael Fix,
Relief or Reform? Reagans Regulatory Dilemma (Washington, DC: Urban Institute, 1984); W. Kip Viscusi,
Fatal Tradeoffs: Public and Private Responsibilities for Risk (New York: Oxford University Press, 1995);
John D. Graham, Saving Lives through Administrative Law and Economics, University of Pennsylvania
Law Review 157 (2008): 395.
9. Hopkins et al., Review of the Regulatory Interventions, ii.
8
for sugar, for example, are not accessible to US buyers, and this is simply one among
many vestiges of protectionism that remain in 2014.
10
Elsewhere in the regulatory universe, many concerns that CWPS articulated
remain troublesome features of many regulations. Return once more to the basic
question of the role of market forces. As the 1981 CWPS report noted,
Any increase in efficiency of resource allocation allows economic
welfare to be improved by increasing the ability of the economy to
satisfy consumers demands. . . . Properly functioning competitive
markets allocate resources efficiently, because the interaction of sup-
ply and demand guides resources into their most highly valued uses.
11
But of course markets do not always function properly, and it is this theme that has
spawned most of the growth in regulation since 1970.
The CWPS report acknowledged,
Few if any markets achieve ideal competitive performance. But
very few, if any, regulations achieve an ideal outcome, either.
Since even imperfect markets often produce satisfactory eco-
nomic results, and since their deficiencies are more likely to be
self-correcting than those of government regulation, the burden
of proof should be on the regulator to show that there is sufficient
market failure to necessitate regulation and that the chosen regu-
latory action can be expected to yield a better outcome than the
improperly functioning market.
12
The needed economic analysis should clarify effects that a regulation will have
on all those affected. This is necessary to allow both informed comment from the
public and sensible decisions by the regulators.
13
While economists of all stripes find
this approach perfectly reasonable, and executive orders issued by all presidents
since Ford have been supportive, much resistance was encountered at the outset
and continues to the present. For example, in 1976, an influential congressional
10. Paul Alexander, Sugar Subsidies: Lawsuit Pulls the Curtain Back on Big Sugar, Palm Beach Post,
March 5, 2014; K. William Watson and Sallie James, Regulatory Protectionism: A Hidden Threat to Free
Trade (Policy Analysis No. 723, Cato Institute, Washington, DC, April 9, 2013), http://object.cato.org
/sites/cato.org/files/pubs/pdf/pa723.pdf.
11. Hopkins et al., Review of the Regulatory Interventions, 8.
12. Ibid., 10.
13. For example, EO 12866 states, Each agency shall . . . provide the public with meaningful participa-
tion in the regulatory process. In particular, before issuing a notice of proposed rulemaking, each agency
should, where appropriate, seek the involvement of those who are intended to benefit from and those
expected to be burdened by any regulation (including, specifically, State, local, and tribal officials). 58
Fed. Reg. 51735 (Sept. 30, 1993).
9
subcommittee issued a 700-page report whose bottom line was a strong criticism
of the use of benefit-cost analysis in environmental and other social regulation.
14

Chaired by Congressman John E. Moss, the subcommittee concluded,
The limitations on the usefulness of benefit/cost analysis in the
context of health, safety, and environmental regulatory decision-
making are so severe that they militate against its use altogether.
15
The Moss subcommittee conclusion was in part a reaction to the fact that CWPS
had been an early and enthusiastic advocate of using benefit-cost analysis in regula-
tory decision-making. As the Ford administration was nearing its end, CWPS pre-
pared an evaluation of the regulatory oversight program then in place, noting that the
requisite economic analysis of proposed regulations should incorporate the following:
an analysis of the principal cost . . . of the action . . .
a comparison of the benefits to be derived from the proposed
action with the estimated costs, and
a review of alternatives to the proposed action, [and] their
probable costs, benefits, and risks . . . compared with those of
the proposed action.
16
CWPSs continuing encouragement of benefit-cost analysis was evident in
most of its filings. Consider two examples. In 1978, CWPS filed comments on a
Department of Transportation proposal to reduce allowable hours of driving by
both truck and bus drivers, asserting,
Even if the benefits outweigh the costs of a particular proposal,
that plan should not necessarily be implemented. If there are other
plans that yield a greater excess of benefits over costs, they should
be considered as well. Normally, the approach yielding the greatest
excess of benefits over costs should be chosen.
17
14. House of Representatives Committee on Interstate and Foreign Commerce, Subcommittee on
Oversight and Investigations, Federal Regulation and Regulatory Reform, October 1976, http://3197d
6d14b5f19f2f440-5e13d29c4c016cf96cbbfd197c579b45.r81.cf1.rackcdn.com/collection/papers/1970
/1976_1001_MossConclusionsT.pdf.
15. Ibid., 515.
16. Council on Wage and Price Stability, An Evaluation of the Inflation Impact Statement Program,
Report prepared for the White House Economic Policy Board, Dec. 7, 1976 (Thomas D. Hopkins et al.),
17, http://www.thecre.com/ombpapers/Ford.htm#f2.
17. Council on Wage and Price Stability, Federal Motor Carrier Safety Regulations, Hours of Service,
Comments Before the Department of Transportation Federal Highway Administration, Nov. 1978
(Elizabeth Pinkston et al.), 15, http://cwps.mercatus.org/wp-content/uploads/110801.pdf.
10
The second example comes from a 1980 filing on a proposed rule to require the
removal from food-processing plants of equipment containing fluid polychlorinated
biphenyls (PCBs). CWPS recommended that the agency should compare the ben-
efits with the cost of compliance before deciding on a final rulethe agencys eco-
nomic analysis had not done so.
18
CWPSs use of benefit-cost analysis reflected a rather expansive interpretation
of the four successive executive orders under which it operatedFords 11821 and
11949 and Carters 12044 and 12221. Those EOs used terms such as inflation impact
analysis, economic analysis, and cost-effectiveness analysis. The language of execu-
tive orders eventually caught up with the approach CWPS had taken in its filings.
Benefit-cost analysis was endorsed explicitly for the first time in President Reagans
1981 EO 12291, signed just as the CWPS regulatory oversight function and econo-
mists were moving into OIRA within the Office of Management and Budget, and
again in President Clintons EO 12866, which remains in effect today.
In the years since 1976, thanks largely to the executive orders noted above, execu-
tive branch regulatory agencies have providedfor major proposed new regula-
tionseconomic analyses that contain at least certain elements of benefit-cost
analysis. Regulators, who sometimes act as advocates for particular needs or con-
stituencies, were slow to see the value of analysis having an economy-wide context.
Yet headway eventually was made. Among the most impressive later examples, the
EPAs well-crafted benefit-cost analysis made the case for the elimination of lead
from gasoline much stronger and far more persuasive;
19
indeed it is reasonable to
conclude that the resulting decrease in lead emissions is perhaps the major envi-
ronmental success story of the 1980s.
20
Unfortunately, most agency analyses remained deficient in important ways, as
CWPS filings stressed, lessening their value for guiding regulatory improvement.
The majority of CWPS filings included at least one of the following conclusions:
the regulatory agency either failed to estimate benefits or had done so incor-
rectly, the agency either failed to estimate costs or had done so incorrectly, and
the agency should have examined different regulatory options. Such conclusions
certainly apply to a set of 11 case studies drawn from CWPS filings completed dur-
ing 1975 and 1976 that James C. Miller III and Bruce Yandle published in 1979.
21

18. Council on Wage and Price Stability, Prohibition of PCB-Containing Equipment or Machinery and
Liquid Polychlorinated Biphenyls (PCBs) in Federally-Inspected Meat Establishments, Poultry Product
Establishments and Egg Product Plants, Comments Before the United States Department of Agriculture,
Food Safety and Quality Service, December 1980 (Elizabeth Pinkston et al.), 11, http://cwps.mercatus.org
/wp-content/uploads/180401.pdf.
19. Environmental Protection Agency, Costs and Benefits of Reducing Lead in Gasoline: Final Regulatory
Impact Analysis, 1985 (EPA-230-05-85-006).
20. Viscusi, Fatal Tradeoffs, 76.
21. James C. Miller III and Bruce Yandle, eds., Benefit-Cost Analyses of Social RegulationCase Studies
from the Council on Wage and Price Stability (Washington: American Enterprise Institute, 1979).
11
The subsequent 1981 CWPS summative report (discussed above) details 31 more
cases drawn from 1978, with similar conclusions.
22
The three tables appearing in Appendix A summarize the entire body of CWPS
work. Table 1 shows CWPS interventions by year over its lifetime (19741981) and
by agency. Independent agencies attracted 43 percent of CWPS filings, while execu-
tive branch agencies accounted for 52 percent. The EPA had 16 percent. And 25
percent of all CWPS filings addressed regulations at the Civil Aeronautics Board and
the Interstate Commerce Commission, two transportation regulatory agencies that
no longer exist. Most of these last filings have no contemporary applicability, fortu-
nately, given our nearly complete deregulation of pricing in transportation markets.
Table 2 classifies CWPS filings by the type of market failure that motivated each
agencys proposed regulations. About 24 percent involved externalities, the single
most common driver of all regulations that CWPS reviewed. CWPS concluded that
no market failure existed in 22 percent of its interventions, contending that deregu-
lated markets would deliver more efficient outcomes.
Table 3 provides a further breakdown of CWPS filings, this one listing those indus-
tries most affected by regulations on which CWPS provided comments, again detailed
by agency. Not surprisingly, given the importance of transportation regulation dur-
ing much of CWPSs life, some 34 percent of CWPS filings addressed transportation
regulatory issues, far more than any other industry. The next largest shares were for
manufacturing (18 percent) and for mining, quarrying, oil, and gas (11 percent).
The following five examples of CWPS work, drawn from those filings now avail-
able on the Mercatus Center website, highlight some of the most common issues
CWPS economists found in dealing with regulatory agencies.
EXAMPLE 1: SECURITIES AND EXCHANGE COMMISSION, 1976
In 1976, CWPS commented on a Securities and Exchange Commission (SEC) pro-
posal to disseminate securities information.
23
The SEC had been concerned that
buyers and sellers might not always be able to obtain the best price due to inad-
equate and inferior information. The agency was also concerned that the same secu-
rity might have different prices in different markets. The SEC proposal therefore
was to create a composite quotation system to ensure better pricing. However, mar-
ket mechanisms, such as arbitrage, already acted to resolve the rare occurrences of
different prices. This led CWPS to observe,
No evidence has been presented to justify this claim or to justify
the claim that the benefits of the additional information that would
22. Hopkins et al., Review of the Regulatory Interventions, Appendix B, 377.
23. Securities and Exchange Commission, Eligible Securities Dissemination of Quotations: Notice of
Proposed Rulemaking, 41 Fed. Reg. 32856 (1976).
12
be produced are sufficient to outweigh the costs of generating and
disseminating that information. To our knowledge, the [Securities
and Exchange] Commission has neither analyzed the benefits of
the proposal nor its costs, nor has it documented the existence of a
problem in need of remedy.
24
CWPS concluded that the SEC had not shown that there was a problem in need
of a solution. Intuitively, trying to fix a nonexistent problem would incur costs that
exceeded any possible benefits. In CWPSs view, if the costs exceeded benefits,
then the regulation would be inflationary as well as inefficient, and it should not be
implemented.
Moreover, the issue of not analyzing the costs and benefits warranted note. A
benefit-cost analysis provides useful information about the effects a regulatory deci-
sion will have. Without it, the quality of the decision suffers, and third parties are
less able to offer useful comments on the proposal. The CWPS filing argued,
In the absence of an analysis of the proposals costs and benefits,
an informed decision on the proposal cannot be made. The Council
would therefore recommend that a decision be postponed until
such information can be developed.
25
In 1977, the SEC released an updated version of the rule and responded to vari-
ous public comments, including the CWPS filing. Its updated proposal stated that
the SEC had carefully considered the costs and benefits of the regulation and had
determined that, although difficult to quantify, the benefits outweighed the costs.
26

While the SEC changed the method of exchange quotation collection, the basic reg-
ulatory approach of the earlier proposal was retained and the proposal was adopted
in 1978.
27
The CWPS filing, in this case, seems to have raised the acceptability of benefit-
cost analysis somewhat. But little headway was gained in making analytical findings
transparent, and the extent of efficiency gains from the final rule, if there were any,
could not be determined.
24. Council on Wage and Price Stability, Eligible Securities Dissemination of Quotations, Comments
Before the Securities and Exchange Commission, October 6, 1976 (Thomas Lenard et al.), 3, available at
http://cwps.mercatus.org/wp-content/uploads/5-1502.pdf.
25. Ibid., 3.
26. Securities and Exchange Commission, Dissemination of Quotations for Reported Securities: Notice
of Proposed Rulemaking, 42 Fed. Reg. 32418 (1977).
27. Securities and Exchange Commission, Dissemination of Quotations for Reported Securities: Final
Rule, 43 Fed. Reg. 4342 (1978).
13
EXAMPLE 2: ENVIRONMENTAL PROTECTION AGENCY, 1978
In 1978, the EPA proposed new drinking water regulations. These regulations
would require any community water systems serving 75,000 or more people to
reduce the level of organic chemicals in public drinking water.
28
The EPA proposal
contained no analysis of the benefits of alternative performance standards, no analy-
sis of alternative population-size cutoffs, and no analysis of the costs or the benefits
of alternative design standards.
29
CWPS concluded that there was a considerable
amount of uncertainty about both the costs and the benefits of the alternatives. The
EPA was relying on excessively uncertain evidence to impose costly regulations on
local communities.
30
CWPS made preliminary calculations to show the benefits of doing a benefit-cost
analysis of alternative options. The results suggested an alternative that could save
more lives with no increase in costs. By not exploring the various options available,
the EPA had been working with incomplete information that led to an inefficient
and costly solution.
After reviewing public comments, the EPA revised its cost estimates of the
treatment plan and published an updated proposal.
31
The new version included
higher cost estimates of the required treatment plan and called for additional
input from the public. Then in November 1979 the EPA issued a final rule that
was even more stringent than the initial proposal.
32
The EPA did not incorpo-
rate benefit-cost analysis of alternative treatment options, contending that the
additional information the agency gathered supported its original proposal, and it
kept intact fundamental aspects of the proposal. CWPSs argument for better cost
analysis appeared to have borne some fruit, but the EPA nevertheless disregarded
the core of the CWPS filing.
EXAMPLE 3: DEPARTMENT OF TRANSPORTATION, 1978
In 1978, the Bureau of Motor Carrier Safety (BMCS), a part of the Department of
Transportation, proposed extensive changes in the rules governing how many hours
commercial bus and truck drivers could remain on duty and behind the wheel of
28. Environmental Protection Agency, Control of Organic Chemical Contaminants in Drinking Water:
Notice of Proposed Rulemaking, 43 Fed. Reg. 21943 (1978).
29. Council on Wage and Price Stability, Proposed Drinking Water Regulations, Comments Submitted
to the Environmental Protection Agency, September 1978 (Ivy Broder et al.), 1, http://cwps.mercatus.org
/wp-content/uploads/101401-change-2.pdf.
30. Ibid., 2.
31. Environmental Protection Agency, Proposed Regulations for Control of Organic Chemical
Contaminants in Drinking Water, 43 Fed. Reg. 29135 (1978).
32. Environmental Protection Agency, Control of Organic Chemical Contaminants in Drinking Water:
Final Rule, 44 Fed. Reg. 68624 (1979).
14
their vehicles.
33
The proposed changes would be very costly. One industry spokes-
man estimated that intercity trucking companies could see costs increase from $2.7
billion to $5.5 billion (due to a 1530 percent reduction in the productivity of driv-
ers and equipment).
34
These changes would have varying effects and costs on the
companies within the truck and bus industry. The BMCS regulatory proposal did
not explore whether equal or greater benefits might be produced by alternative, less
burdensome solutions.
35
The varying degree by which individual companies and subdivisions of the
industry would be affected by the proposed regulation complicated assessing
the cost of the proposal. However, CWPS urged the BMCS to further analyze the
effect the proposed regulation would have on costs to the several subsectors of the
industry. CWPS recognized the difficulty of determining a benefit in monetary
terms when that benefit is increased safety and possibly saved human lives. CWPS
therefore suggested that, instead of benefit-cost analysis, the BMCS undertake a
cost-effectiveness analysis of the proposed regulation.
Again, CWPS identified a problematic lack of alternatives, concluding that the
BMCS should undertake both studies of alternative methods of improving safety
and an analysis of their potential costs and benefits.
36
Due to the diversity of effects
the proposed regulation had across the truck and bus industry, CWPS suggested
that the BMCS look into tailoring regulation to the specific subindustries. For exam-
ple, if the majority of accidents came from one sector of the industry, the regulation
should focus on that sector. Ultimately, the lack of information gathered and options
examined led CWPS to comment that the BCMS was not heading in a cost-effective
direction with the proposed regulation.
After reviewing the CWPS filing and other public comments on the proposed
regulation, the BMCS determined that none of the proposed options could be sup-
ported and began to conduct more extensive benefit-cost analysis. The BMCS devel-
oped three new options to regulate hours of service for drivers, but the rulemaking
was terminated in September 1981.
37
CWPS had not been alone in its criticism of the
1978 BMCS proposal, but its comments contributed to avoiding an ill-considered
and very costly regulation. Nonetheless, in succeeding years, substantial further
action has taken place in regulating driver hours of service, a topic to which this
paper returns later.
33. Department of Transportation Bureau of Motor Carrier Safety, Hours of Service of Drivers: Advance
Notice of Proposed Rulemaking, 43 Fed. Reg. 21905 (1978).
34. CWPS, Federal Motor Carrier Safety Regulations, Hours of Service, 9.
35. Ibid., 3.
36. Ibid., 18.
37. Department of Transportation, Federal Motor Carrier Safety Administration, Hours of Service of
Drivers; Driver Rest and Sleep for Safe Operations: Proposed Rule, 65 Fed. Reg. 25540 (2000), https://
www.federalregister.gov/articles/2000/05/02/00-10703/hours-of-service-of-drivers-driver-rest-and
-sleep-for-safe-operations#h-20.
15
EXAMPLE 4: FEDERAL AVIATION ADMINISTRATION, 1979
In 1979, the Federal Aviation Administration (FAA) proposed an increase to air-
craft and airport security for certain air taxi operators and small airplane operations
(2030 passengers) in order to deter airplane hijacking.
38
The proposed regulation
would force small airports and small airplane providers to have the same security
measures as certificated carriers (commercial airlines). These security measures
included installing metal detectors and X-ray machines to screen passengers and
their baggage, enclosing airports with fences, and hiring specially trained security
personnel.
39
The FAA cost estimates appeared to ignore important categories of costs. For
instance, the FAA assumed that police officers and operators of security screening
machines could be hired for a half-hour at a time. Yet, in many cases, a four-hour
shift is the shortest period for which such personnel can be employed.
40
Also, the
FAA did not consider additional potential costs that would arise from the unin-
tended consequences of its decision. For example, commuter airlines might start
to operate smaller aircraft in order to avoid the constraints created by the FAAs
proposal. Yet the smaller aircraft could limit the number of communities that the
airlines could serve.
41
CWPS concluded that, because of its potentially severe effect on the commuter
air carrier industry, the proposal should be subjected to careful cost-benefit or cost-
effectiveness analysis.
42
CWPS suggested that the FAA examine alternatives to the
proposed regulation that would yield the benefits desired at a smaller cost. These
alternatives included targeting regulation to high-risk airports, having random
screenings instead of screening every passenger, or phasing in the additional secu-
rity measures instead of requiring them all at once.
After considering comments from CWPS and others, the FAA in January 1981
issued a final rule that was markedly less costly than the originally proposed rule
would have been.
43
The agency agreed with critics that its initial economic analysis
had been inadequate and that its proposed full security program need not be imple-
mented for small planes. Small airports and small airplane operators were spared
costly adjustments, while overall safety benefits were still achieved.
38. Federal Aviation Administration, Aircraft and Airport Security: Air Carrier OperationsNotice of
Proposed Rulemaking, 44 Fed. Reg. 63048 (1979).
39. Council on Wage and Price Stability, Aircraft and Airport Security; Air Carrier Operations,
Comments Before the Federal Aviation Administration, February 1980 (Elizabeth Pinkston et al.), 3,
http://cwps.mercatus.org/wp-content/uploads/1520012.pdf.
40. Ibid., 5.
41. Ibid., 6.
42. Ibid., 8.
43. Federal Aviation Administration, Airplane and Airport Operator Security: Final Rule, 46 Fed. Reg.
3782 (1981).
16
EXAMPLE 5: FOOD AND DRUG ADMINISTRATION, DEPARTMENT OF
AGRICULTURE, AND ENVIRONMENTAL PROTECTION AGENCY, 1980
In 1980, CWPS commented on a joint regulation by the Food and Drug
Administration, the Department of Agriculture, and the Environmental Protection
Agency.
44
The joint proposal would establish a requirement that equipment or
machinery (with few exceptions) in food-related industrial plants could no longer
contain fluid polychlorinated biphenyls. The proposal aimed to reduce the risk to
human health from accidental spills or leakage of PCB fluid that could contami-
nate food.
CWPS summarized its concerns as follows:
We question whether there has been sufficient analysis of the
current proposal and its ramifications to ensure that it is the best
available course of action. In particular we fear that the proposal
could have the perverse effect of increasing the risk, through
improper disposal, of PCB contamination. We also believe that
alternative ways of protecting human health should be examined
more carefully.
45
CWPS noted that the three agencies gave little attention to unintended conse-
quences that the regulation could have. The proposed removal and disposal pro-
cess could very well inadvertently increase PCB exposures.
46
Because the potential
increase in exposure was not taken into account, the benefits of the proposed regu-
lation were overstated. Moreover, CWPS concluded that the costs of the proposal
would be substantially higher than the regulators had estimated.
47
CWPS suggested four additional options. First, a wait and see approach: wait
until a new technology was created to decontaminate PCB fluids at the plant site,
thereby eliminating both the risk and expense of transporting PCBs to approved
disposal sites and also saving the decontaminated oil.
48
The second option was a tar-
geted phaseout program, where the equipment most likely to cause contamination
would be phased out first. The third option would involve equipment inspections
that looked for PCB fluid leaks, and the final option was a combination program of
inspections and a targeted phaseout program.
44. Department of Agriculture Food Safety and Quality Service, Prohibition of PCB-Containing
Equipment or Machinery and Liquid Polychlorinated Biphenyls (PCBs) in Federally-Inspected
Meat Establishments, Poultry Product Establishments and Egg Product Plants: Notice of Proposed
Rulemaking, 45 Fed. Reg. 30980 (1980).
45. CWPS, Prohibition of PCB-Containing Equipment, 2.
46. Ibid., 6
47. Ibid., 15
48. Ibid., 16
17
The situation was unusually complex procedurally because three agencies were
involved and the proposal was part of an interconnected series of actions aimed
at reducing risks from PCBs. The criticisms from CWPS and others did not by any
means lead the agencies to embrace benefit-cost analysis. But skepticism about the
proposal was sufficient to lead the EPA in April 1981 to drop the proposal (hold [it]
in abeyance) while restarting a rulemaking to gather fuller information.
49
RECURRING ISSUES
These five examples reflect recurring issues that CWPS found in most of the pro-
posed regulations examined: inadequate analysis of benefits, costs, and alternatives.
Often what this paper refers to as the first principle issuewhether any compel-
ling market failure existedwas entirely overlooked. In some cases, CWPS con-
cluded that states or localities were better suited to solve the issue or that the data
used were inapplicable or out of date.
As noted earlier in this paper, presidents from Ford to Obama have issued executive
orders that call for reviewing proposed regulations for these types of issues, and OIRA
has made numerous efforts in the post-CWPS era to encourage regulators to improve
the quality of their analyses, even providing guidance in many different forms.
50
Yet it is not difficult to find more recent instances of regulatory decision-making
that reflect the same weaknesses that CWPS highlighted decades earlier. For exam-
ple, the Securities and Exchange Commission in 1999 proposed new regulation of
market information as a response to a concern that monopolistic pricing of informa-
tion could diminish access for, or discriminate against, retail investors.
51
However,
a submission provided by Jerry Ellig and S. Brown-Hruska observes that the
Commission offers no cost-benefit analysis . . . and there is strong reason to believe
that the costs of the guidelines would exceed their benefits.
52
In other cases today, regulators do provide credible estimates of net benefits of
options considered, but the first principle is still overlooked. In December 2010,
the Department of Transportation proposed to further revise the requirements con-
cerning truck drivers hours of service (continuing in the tradition of example 3
discussed earlier in this paper). An analysis of this rulemaking from the Mercatus
49. Environmental Protection Agency, Abeyance of Proposed Rule: Reductions in Use of PCBs at
Agricultural Pesticide and Fertilizer Facilities, 46 Fed. Reg. 25411, 2541118 (1981); further PCB regula-
tory developments across the agencies are not here examined.
50. One promising guide is a 2010 document that if followed would result in improved outcomes.
Agency Checklist: Regulatory Impact Analysis, Office of Information and Regulatory Affairs, accessed
July 30, 2014, http://www.whitehouse.gov/sites/default/files/omb/inforeg/regpol/RIA_Checklist.pdf.
51. Regulatory Studies Program of the Mercatus Center, George Mason University, Public Interest
Comment on the Security and Exchange Commissions Concept Release on Regulation of Market
Information, Fees and Revenues (prepared by Jerry Ellig and S. Brown-Hruska), Release No. 34-42208
(2000), https://www.sec.gov/rules/concept/s72899/gramm1.htm.
52. Ibid., Appendix 1, RSP Checklist.
18
Center concludes that no market failure or systemic problem was identified by
the regulator.
53
The truck driver rule warrants closer inspection because it encompasses many of
the issues that are central to this paper. The 2010 proposal led to a new final regula-
tion in December 2011.
54
The agency summarized the outcome as follows:
[The Federal Motor Carrier Safety Administration] revises the
hours of service (HOS) regulations to limit the use of the 34-hour
restart provision to once every 168 hours and to require that any-
one using the 34-hour restart provision have as part of the restart
two periods that include 1 a.m. to 5 a.m. It also includes a provi-
sion that allows truckers to drive if they have had a break of at
least 30 minutes, at a time of their choosing, sometime within the
previous 8 hours. This rule does not include a change to the daily
driving limit because the Agency is unable to definitively demon-
strate that a 10-hour limitwhich it favored in the notice of pro-
posed rulemaking (NPRM)would have higher net benefits than
an 11-hour limit. The current 11-hour limit is therefore unchanged
at this time.
55
The final rule, which took full effect in July 2013, resulted in limiting the aver-
age work week for truck drivers to 70 hours.
56
The regulator contends that this
new rule will reduce the likelihood of driver fatigue, fatigue-related crashes, and
fatigue-related health effects. Yet the agency recognizes that a significant decline
in crashes and crash rates for both trucks and cars started in the late 1970s and has
continued for both types of vehicles.
57
It notes,
[The] motor carrier industry argued that the declining fatality rate
for truck-related crashes since 2004 demonstrates that the [2003]
HOS rule is safe and should not be changed . . . and that changing
the rule would produce serious economic consequences for carri-
ers, drivers, shippers, receivers, and consumers. . . . The industry
53. Mercatus Center Regulatory Report Card for Commercial Motor Vehicle Hours of Service Proposed
Rule, 2011, Mercatus Center at George Mason University, http://mercatus.org/reportcards/commercial
-motor-vehicle-hours-service.
54. Federal Motor Carrier Safety Administration, Hours of Service of Drivers, Final Rule, 76 Fed. Reg.
81134 (2011).
55. Id.
56. Department of Transportation, New Hours-of-Service Safety Regulations to Reduce Truck Driver
Fatigue Begin Today, Press Release, FMCSA 40-13, July 1, 2013.
81139.
19
generally disagreed with the notion that drivers are not getting suf-
ficient sleep and that chronic fatigue is a problem.
58
Indeed, over 20,000 comments both from the private sector and from state and
local governments were submitted during the public comment period.
59
The sources
of the comments ranged from individual truck drivers to the National Turkey
Federation and the US Chamber of Commerce, and many of them were highly criti-
cal of the proposal.
The daily driving limit for truckers had been 10 hours for a half-century before
2003 when it was changed to 11 hours, coupled with several new restrictions. Since
2003, this area of rulemaking has been a quagmire of procedural complexities, includ-
ing a 2007 court decision vacating portions of the 2003 rule followed by continuing
litigation, which was held in abeyance while the 2011 rulemaking was completed.
60
The agencys notice of proposed rulemaking for the 2011 rule stated a likely
preference for tightening the restriction once again to 10 hours while retaining
the other 2003 restrictions. It is important to note that, in addition to guidance
through executive order, this regulatory agency operates under a statute requiring
it to consider the costs and benefits of proposed rules.
61
In consequence, the agency
stated that this rule does not include a change to the daily driving limit because
the Agency is unable to definitively demonstrate that a 10-hour limitwhich it
favored in the notice of proposed rulemaking (NPRM)would have higher net
benefits than an 11-hour limit.
62
After reviewing three alternative courses of action, the agency decided on a rule
whose benefits could easily be substantial, and are on the same scale as the costs.
63

It put the 2011 final rules range of net benefits annually from a negative $250 mil-
lion to a positive $770 million. The annualized cost itself is put at $470 million, an
amount that the agency describes as a mere 3-cents-per-gallon increase in fuel costs.
The agency decided against a more stringent regulation (the 10-hour limit) based at
least in part on benefit-cost considerations. The industry, not surprisingly, believes
the net benefits are far smaller and, indeed, negative.
64
Among the conundrums presented by this rulemaking: What reason exists to
think that truck drivers and their employers lack the incentive to reduce fatigue
58. Id. at 8114142.
59. Id. at 81138.
60. Owner-Operator Independent Drivers Association, Inc. v. Federal Motor Carrier Safety
Administration, 494 F.3d 188 (D.C. Cir. 2007).
61. 39 U.S.C. 31136(c)(2)(A) and 31502(d).
81139 (2011).
63. Department of Transportation, Federal Motor Carrier Safety Administration, 20102011 Hours of
Service Final Rule Regulatory Impact Analysis, RIN 2126-AB26 (December 2011): ES-4.
64. See 76 Fed. Reg. 81143 (2011) and the agencys regulatory impact analysis summarized in in 76 Fed.
Reg. 81175, 8117580 (2011).
20
risks? What, that is, can we identify as a market failure? And if the truck accident
record is steadily improving, as the agency acknowledges, what is the motivation
for new regulation?
More generally, the adequacy of the economic analysis that regulators provide
for new regulations has been the focus of numerous reviews since 2000, and basi-
cally all reviewers conclude that analytical weaknesses are commonplace.
65
Most
recently, the Mercatus Center has begun systematic and ongoing assessments that
rank and classify problems with the analyses that accompany new regulations. This
Mercatus Regulatory Report Card project so far includes all significant regulatory
analyses completed from 2008 through 2012, and the results are not encouraging.
The quality of most regulatory analyses remains disappointing.
66
The work of CWPS focused primarily on regulations at the proposal stage; this
remains a promising point at which critical analysis should be brought to bear.
OIRA, now the key player in White House regulatory oversight, is able to engage
executive branch agencies even earlier in the process, which should be a consider-
able advantage. OIRA is able to interact with regulators before the public release
of a proposed rule, at a time when the supporting analysis is still taking shape. Yet
outcomes generally fall short of consistent adherence to key principles of benefit-
cost analysis.
Treatment of market failure concerns is probably the most telling example. As
Christopher DeMuth has pointed out, cost-benefit analysis is supposed to be a tool
for correcting market failures, not the personal failings of individual citizens.
67
Yet
many of the most costly new regulations in recent years rest their claims of positive
net benefits on forecasts that compliance will return substantial private benefits
to purchasers. No clear market failure is apparent. Without market failure, there
is good reason to believe that individuals could make their own decisions quite
65. Among the more prominent: Winston Harrington, Richard Morgenstern, and Peter Nelson,
On the Accuracy of Regulatory Cost Estimates, Journal of Policy Analysis and Management 19, no.
2 (2000): 297332; Winston Harrington, Grading Estimates of the Benefits and Costs of Federal
Regulation: A Review of Reviews (Discussion Paper 06-39, Resources for the Future, Washington,
DC, September 2006); Robert W. Hahn et al., Assessing Regulatory Impact Analyses: The Failure of
Agencies to Comply with Executive Order 12866, Harvard Journal of Law and Public Policy 23, no.
3 (2000): 85971; Robert W. Hahn and Patrick Dudley, How Well Does the Government Do Cost-
Benefit Analysis?, Review of Environmental Economics and Policy 1, no. 2 (2007): 192211; Robert W.
Hahn and Robert Litan, Counting Regulatory Benefits and Costs: Lessons for the U.S. and Europe,
Journal of International Economic Law 8, no. 2 (2005): 473508; Robert W. Hahn and Paul C. Tetlock,
Has Economic Analysis Improved Regulatory Decisions?, Journal of Economic Perspectives 22, no. 1
(Winter 2008): 6784.
66. Jerry Ellig and Patrick A. McLaughlin, The Quality and Use of Regulatory Analysis in 2008, Risk
Analysis 32, no. 5 (2012); Jerry Ellig, Patrick A. McLaughlin, and John F. Morrall III, Continuity, Change,
and Priorities: The Quality and Use of Regulatory Analysis across US Administrations, Regulation &
Governance 7, no. 2 (2012): 15373; Jerry Ellig, Improving Regulatory Impact Analysis through Process
Reform, Testimony Before the U.S. Congress Joint Economic Committee, June 26, 2013.
67. Christopher DeMuth, The Regulatory State, National Affairs, no. 12 (Summer 2012).
21
sensibly. That surely is the case with energy efficiency standards from the EPA, the
Department of Transportation, and the Department of Energy, where paternalis-
tic benevolence is passing muster with executive branch reviewers.
68
A return to first principles of benefit-cost analysis is overdue in the over-
sight process. John F. Morrall III and James W. Broughel articulate what this will
entail in a 2014 report for the Mercatus Center.
69
In addition, a strong case can be
made for supplementing more demanding oversight prospectively with the types
of retrospective reviews that executive orders 13563 and 13610 endorse but have
rarely secured.
70
The issues observed by CWPS starting in 1974 have been revisited repeatedly,
with much the same findings. Moreover, setting to one side the body of regulation
from the Civil Aeronautics Board and the Interstate Commerce Commission, those
agencies and industry-specific regulations that came in for heaviest CWPS criticism
are still very much in the forefront of regulatory debate today. Perhaps the basic les-
son is that a more independent and economic-efficiency-driven review mechanism
would be constructive. Independent peer review with public access is missing from
the current system of regulatory oversight, and it could be a significant step forward,
one that would be made appreciably easier were congressional support to be gained.
Until and unless this proves feasible, the US regulatory system will continue to fall
well short of achieving available efficiency gains.
68. Ted Gayer and W. Kip Viscusi, Overriding Consumer Preferences with Energy Regulations, Journal
of Regulatory Economics 43, no. 3 (2013): 24864.
69. John F. Morrall III and James W. Broughel, The Role of Regulatory Impact Analysis in Federal
Rulemaking (Arlington, VA: Mercatus Center at George Mason University, 2014), http://mercatus.org
/publication/role-regulatory-impact-analysis-federal-rulemaking.
70. For a succinct statement urging more retrospective review, see Cary Coglianese, Moving Toward the
Evaluation State, Penn Program on Regulation RegBlog, December 9, 2013.
22
APPENDIX A: THE NATURE AND RANGE OF CWPS FILINGS
Sources for all tables: CWPS filings from the Council of Wage & Price Stability
Archive, Mercatus Center at George Mason University, http://cowps.mercatus
.org; Thomas D. Hopkins, Thomas M. Lenard, John F. Morrall III, and Elizabeth
A. Pinkston, Appendix A in A Review of the Regulatory Interventions of the
Council on Wage and Price Stability, 19741980 (Council on Wage and Price
Stability, Washington, DC, January 1981), available at http://cowps.mercatus
.org/2014/07/17/cwps-review-1974-1980/; accompanying spreadsheet (see
Appendix B).
Table 1. CWPS Filings, 19741981, by year and by agency
I. EXECUTIVE BRANCH AGENCIES
1974 1975 1976 1977 1978 1979 1980 1981 TOTAL
Dept. of Commerce 1 2 3
Dept. of Defense 1 1
Dept. of Energy 3 2 2 3 9 10 29
Dept. of the Interior 2 1 5 5 1 14
Dept. of Labor 2 5 5 3 3 18
Dept. of Transportation 1 10 3 4 4 6 1 29
Environmental Protection Agency 8 4 4 7 14 17 1 55
Dept. of Health, Edu. & Welfare* 6 6 1 2 4 19
Dept. of Housing & Urban Develop. 1 1 1 3
Dept. of Agriculture 2 2 2 5 1 12
Subtotal 1 32 26 19 18 30 53 4 183
* In 1979 this department split into the Department of Education and the Department of Health and Human Services.
23
II. INDEPENDENT AGENCIES
1974 1975 1976 1977 1978 1979 1980 1981 TOTAL
Architectural & Transportation Barriers
Compliance Board
2 2
Civil Aeronautics Board 16 8 4 1 29
Commodity Futures Trading
Commission
2 1 3
Consumer Product Safety Commission 1 4 1 6
Federal Communications Commission 2 2 1 1 6 12
Federal Deposit Insurance Corp.;
Federal Reserve Board
2 1 2 5
Federal Home Loan Bank Board 1 1
Federal Maritime Commission 1 1
Federal Power Commission 3 1 1 2 1 8
Federal Trade Commission 1 4 1 1 1 8
Interstate Commerce Commission 8 12 14 16 10 60
International Trade Commission 2 2 1 2 2 1 10
Postal Rate Commission 1 1 2
Securities & Exchange Commission 2 1 3
Tennessee Valley Authority 2 2
Subtotal 25 31 25 20 28 22 1 152
III. OTHER
1974 1975 1976 1977 1978 1979 1980 1981 TOTAL
Other CWPS reports 7 2 2 2 2 15
IV. TOTAL
1974 1975 1976 1977 1978 1979 1980 1981 TOTAL
Total CWPS filings 1 64 59 46 38 60 77 5 350
24
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29
APPENDIX B: GUIDE TO SPREADSHEET 05092014, ACCOMPANYING
THIS PAPER
The spreadsheet can be found at http://mercatus.org/publication/legacy-council
-wage-and-price-stability.
Data are from CWPS filings from the Council of Wage & Price Stability Archive,
Mercatus Center at George Mason University, http://cowps.mercatus.org;
Thomas D. Hopkins, Thomas M. Lenard, John F. Morrall III, and Elizabeth
A. Pinkston, Appendix A in A Review of the Regulatory Interventions of the
Council on Wage and Price Stability, 19741980 (Council on Wage and Price
Stability, Washington, DC, January 1981), available at http://cowps.mercatus
.org/2014/07/17/cwps-review-1974-1980/.
Entries for 160 filings that can be found in the Mercatus collection include
information on the submission date, title, type of document, the agency the fil-
ing addresses, the topic, and key points. Also noted: the type of market failure
the regulation addresses and the industry the regulation impacts.
In addition, 15 binary variables offer information on the economic analysis pro-
vided by the regulator. We posed a series of questions about this analysis, e.g.,
The agency has either failed to estimate benefits or has done so incorrectly.
An X entry indicates a yes and a blank cell indicates a no.
Entries for 190 other filings include the submission date, title, agency, industry
affected, and type of market failure the regulation addresses. The information
for these entries comes from Appendix A of the above-cited 1981 CWPS report,
Review of the Regulatory Interventions.
Three worksheets are included: the first is segmented by type and sorted by
year within type; the second is sorted by year; the third is sorted by agency.
Column headings:
A. Author
B. Date
C. Title
D. Type of document
E. Binary variable 1no market failure
F. Binary variable 2benefit estimation problem
G. Binary variable 3cost estimation problem
H. Binary variable 4alternatives neglected
I. Binary variable 5proposal wont solve problem
30
J. Binary variable 6state or local governments should handle
K. Binary variable 7law exceeded
L. Binary variable 8one party favoritism
M. Binary variable 9an existing rule should suffice
N. Binary variable 10data deficient
O. Binary variable 11reduces US competitiveness
P. Binary variable 12regulator uses sound economic analysis
Q. Binary variable 13a price monitoring initiative
R. Binary variable 14inflationary concern
S. Binary variable 15an administrative or other document
T. Agency issuing the proposal
U. Topic/issue involved
V. Key points/quotes
W. Notes/other comments
X. Type of market failure
Y. Industry mainly affected

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